MOXEE — Hop harvesting began across the Yakima Valley this week, and growers are expecting a record 91.8 million pounds in the Northwest this year.
That’s a 16 percent increase over last year. But the growth is being greeted with cautious optimism by the hop industry due to concerns supply may soon outpace demand, said Ann George, Hop Growers of America executive director.
Production has grown 50 percent since 2012, according to the U.S. Department of Agriculture, driven by the explosion of craft breweries and America’s growing taste for very hoppy beers.
“The breweries have been growing at a faster rate than we’ve been able to ramp up hop production but we’re going to catch up, ” George said. “What a lot of people are seeing, when you add 13 million more hops, chances are we’re starting to catch up. The question is when do you overshoot the mark?”
One sign demand may be slowing is that hop merchants have more product sitting in warehouses, she said. Unlike a few years ago when some varieties were in short supply, brewers aren’t rushing to pick up their orders as soon as possible.
In the Yakima Valley, where about 75 percent of the nation’s hops are grown, the acreage in hops has grown more than 10,000 acres — to 37,000 — since 2012 as well.
Most of the new acreage is planted in varieties in high demand in recent years, George said, adding that this year’s crop looks really good.
Kevin Riel, a Harrah grower with 1,100 acres of hops, said his hops are not suffering from the heat and water stress that reduced the yields of some high-demand aroma hop varieties during last summer’s heat wave.
“Particularly for the earlier varieties, the “normal” summer weather we had has been very beneficial to them,” Riel said. “I really can’t ask for better.”
But given what Riel sees as slowing growth in the craft beer market, he’s not planning any significant expansions.
“I characterize our operation as slow and steady, in good times and bad we’ve done small, incremental growth,” he said.
Other growers who added significant acreage in recent years may be slowing in the next year or two, George predicted.
“What we hear from people in the field is there’s likely to be some uptick in acreage next year but that acreage increase will slow and we’re likely to see more balancing of the portfolio” in terms of different varieties, she said.
While there are hints warehouses are slowing down, it’s hard to get a detailed picture of supply and demand as the industry has ballooned, George said.
“With more brewers, more merchants, and more growers in the system, we increase our margin of error,” George said. “It used to be pretty easy for the USDA to do surveys, but now we just can’t reach out to every little hop merchant and every little brewery and ask if they have extra hops in storage.”
Most hops are grown under contracts — which set orders and prices in advance — and George said responsible contracting by buyers large and small is key to keeping the hop market stable going forward.
“Of course all growers continue to hope that hops will continue to be up,” she said. “However, at some point we will catch up, the big $50 million question is when we catch up.”
Follow her on Twitter at twitter.com/kprengaman
August 31, 2016 Yakima Herald Republic
Picture: Shawn Gust/Yakima Herald Republic